Greater MSP touts a successful first year

As the Twin Cities' new regional economic development partnership wraps up its first full year, the group's CEO says it's on pace to reach its goals amid an improving economy.

Greater MSP, as the group is known, tallied 25 projects already announced and five more coming by year's end -- leading to 4,000 new or retained jobs and more than $440 million spent on new facilities and equipment.

"We're seeing the economy improving and companies are more willing to make capital investments," said Michael Langley, Greater MSP's chief executive.

Greater MSP helps spur economic development in an 11-county area encompassing the Twin Cities, suburbs and nearby ex-urban locales. About 80 percent of the organization's energy goes to helping existing businesses expand and grow, Langley said.

The partnership is a private-public group with 140 investors and a budget for next year set at $5 million. The revenue split is 80 percent private funding and 20 percent public -- with that portion coming from counties and municipalities.

To mark its first year, Greater MSP met on Monday evening, Nov. 5, at the Guthrie Theatre in Minneapolis to present its results to a crowd of about 700.

The partnership is highlighting a few projects from the last year, including Polaris Industries' decision to double the size of its research and development site near Wyoming, Minn. The group also worked with Cypress Semiconductor, which has a plant in Bloomington, to retain that facility.

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To bring in new and expanding businesses, Greater MSP has a variety of incentives that it can help line up for companies, but "we do need to improve our tool kit," Langley said in an interview Monday.

Existing offerings include a state loan program, tax-increment financing, the Minnesota Investment Fund and the Job Skills Partnership Program, which helps provide training to workers.

The partnership also works with utility companies, including Xcel Energy, to negotiate deals on energy for companies that want to expand.

Langley cited the example of Gerdau, a steelmaker in St. Paul, which in May decided to invest $50 million to replace key equipment at its plant. The company was able to make a deal with Xcel Energy on electrical rates that was approved by the Minnesota Public Utilities Commission.

Another tool is the state's JOBZ program, which Polaris used for its Wyoming plant expansion, Langley said. JOBZ -- which has received some criticism from legislators as costing too much for each job gained -- provides exemptions from local and state taxes and is focused on rural areas of Minnesota.

Of the 11 counties in the Twin Cities area that are served by Greater MSP, only four of the most ex-urban counties can use the JOBZ program.

"We'd like to see that change," Langley said.

The legislation for JOBZ expires in three years and Langley believes it needs to be modified, so as not to exclude certain urban areas that need new investment.

But Langley also emphasized that demographics -- including the high educational attainment of people in the Twin Cities area -- continue to be a big draw for prospective employers and existing businesses that want to expand.

"The No. 1 factor is the quantity and quality of the workforce," Langley said. "That trumps everything."

Greater MSP also opened an office in Shanghai this past year in conjunction with the Minnesota Trade Office, aiming to spur investment from overseas in the Twin Cities' region.

A recent study by JPMorgan found that companies in the Standard & Poor's 500 are sitting on about $1.5 trillion in cash -- which they're hesitant to spend and invest in the face of economic uncertainty.

But as economic conditions improve, Langley says there's evidence more of that cash will be put to work. In addition to the projects realized this year, Greater MSP has about 50 others in the pipeline -- mostly expansions of existing businesses, Langley said.